The Texas Property Code regulates security deposits in San Antonio, TX, and it’s important that you know how to handle them and under what conditions you need to return them to your tenants at the end of a lease.
How Much to Charge
Most landlords charge a security deposit amount that is equal to a month’s rent. So, if your home rents for $1,000 a month, then the security deposit is $1,000. You are only able to use these funds to cover any damages that occur during a tenancy. You are not permitted to use the security deposit for the last month of rent. Sometimes tenants will try to use that money for the last month instead of paying rent, but you need to use those funds for damage only. Explain to your tenants that the Property Code specifically forbids using the security deposit as a rent payment.
Holding Security Deposits
Keeping the security deposit separate from other funds is very important. It’s not your money to be spent and it cannot be mixed in with your personal or business funds. Property managers are required to keep the funds in a trust account, and if you’re managing your own property you should open up a separate savings account for the security deposit.
Returning the Security Deposit
Landlords are legally required to send the security deposit back to the tenant within 30 days of vacancy. When you mail it, the postmark date will document the date that it was returned. If there is tenant damage and you need to keep some or all of the security deposit to pay for repairs, make sure you document what was spent and why. You’ll need to provide receipts and invoices that show what the money was used to correct. It’s not acceptable to keep the deposit based on what you think the repairs will cost. You need documentation.
Move In and Move Out Inspections
Managing the security deposit correctly depends heavily on how thorough and detailed your inspections are at the time of move in and move out. The only way to legally keep part of the security deposit is to document that damage was done while the tenant was living there. You can’t do that without a good inspection report and a lot of photos.
Familiarize yourself with the Texas Property Code before you collect a tenant’s security deposit. Contact Bluefax Realty if you have any questions or need any help.